Heldt v. Commissioner
United States Board of Tax Appeals
A transaction by which the owner of a mortgage upon property takes such property and discharges the mortgage obligation constitutes an exchange of property for other property and gives rise to taxable gain or deductible loss, measured by the difference between the cost of the mortgage and the market value of the property.
1Opinion of the Court
*1036OPINION.
Phillips:
In 1920 the petitioner owned a farm which had cost him, with improvements and after deducting depreciation, $35,362.50. He sold it in that year for $60;000, receiving $20,000 in cash and the balance in a mortgage, which the parties are agreed had no fair market value. In those circumstances no tax could properly be imposed until there was a realization upon the mortgage. No tax *1037was paid on this sale, or, precisely stated, the tax which was paid was subsequently refunded. It seems evident that at this point the petitioner owned a mortgage which, for the purpose of computing…
2Cited by5 opinions
- Bowles Lunch, Inc. v. United StatesUnited States Court of Claims · 1940
- Briesacher v. CommissionerUnited States Tax Court · 1982
- Heldt v. CommissionerUnited States Board of Tax Appeals · 1929
- Title & Trust Co. v. CommissionerUnited States Board of Tax Appeals · 1935
- Webb v. CommissionerUnited States Board of Tax Appeals · 1931